For me and other experts who practice in this space, this was a bit of a "well duh" moment. But given the culminating momentum in the crypto space following the increasingly positive sentiment overall towards the digital assets industry, the Commission was right to make this clear. In a clear-eyed statement issued July 9, 2025, SEC Commissioner Hester M. Peirce addressed the increasing prevalence of tokenized securities, emphasizing that while the underlying technology may be novel, the applicable laws are not.
"Tokenized securities are still securities."
Commissioner Peirce's remarks underscore that market participants must adhere to existing securities law frameworks, regardless of whether the security is on-chain or off-chain. Key considerations include:
- Issuer structure and disclosure: Whether tokenization is performed by the issuer or a third party materially affects risk exposure and compliance obligations.
- Legal nature of the token: Depending on how tokenization is structured, the asset may be considered a receipt for a security, a separate security, or even a security-based swap.
- Regulatory engagement: Peirce encourages market participants to proactively engage with SEC staff when novel structures warrant exemption requests or interpretive guidance.
The takeaway: while blockchain enables new efficiencies in capital markets, it does not nullify the federal securities laws. Counsel should ensure that tokenized offerings are thoroughly vetted under traditional legal standards.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
